- The CFPB announced a proposed settlement with My Loan Doctor, LLC and its founder (together, “Loan Doctor”) over allegations that the company advertised a high-yield savings product but instead invested consumers’ funds in volatile securities, securities-backed investments, and crypto-assets in violation of the Consumer Financial Protection Act.
- According to the CFPB, Loan Doctor allegedly told depositors that their funds would be used to originate loans for healthcare professionals and, when not being used for this purpose, would be held in an FDIC-insured account or an account insured by Lloyd’s of London or backed by a cash equivalent, which accounts had historically earned high returns. However, Loan Doctor never used the deposits to originate loans for healthcare professionals and never entered a contract to purchase a loan; instead, Loan Doctor’s founder allegedly placed the funds in a hedge fund he controlled and in crypto-assets.
- Under the terms of the settlement, Loan Doctor must return approximately $19 million to approximately 400 depositors, stop engaging in deposit-taking activities, and pay a civil money penalty of $391,530, among other things.